Eight weeks into the legislative session, the Alaska House and Senate are poised to take up two pivotal bills: one to use permanent fund earnings to pay for state services and another to approve spending for next year’s state operating budget. Lengthy debate is expected on both measures.

On Monday, the Alaska Senate took up Senate Bill 26 to use the permanent fund as an endowment for state government. The bill specifies a $1,000 dividend for Alaskans over the next three years, while drawing 5.25 percent of the fund’s annual market value to help pay for the state budget. It also caps state spending at $4.1 billion. Debate on the bill will be taken up Wednesday. 

Meanwhile, the House majority – a coalition of 17 Democrats, three Republicans, and two independents – will defend its work on the state operating budget from minority budget amendments, most of which call for more reductions.

 “The budget does reflect our values and most of these cuts do not,” Rep. Paul Seaton, R-Homer, who co-chairs the House Finance Committee, said of the proposed cuts put forth by Republican minority members there. “I mean, they’re just artificial cuts taken from line items in the budget, and those don’t make sense to us because an agency can’t efficiently provide services without some flexibility of how we’re going to provide that service.”

Seaton added that his caucus believes it has now found the right size of government.

The House majority budget increases spending from what Gov. Bill Walker proposed, adding $1.2 million for pre-K programs, $2.1 million for the Alaska Marine Highway System, and restoring the positions of three state prosecutors – two in Anchorage and one in Bethel.

 “You’re not providing good public safety if you’re turning down so many cases that you should be prosecuting,” Seaton said. “And that was the problem with having so few prosecutors.”

The Senate majority has promised deep cuts, with 5 percent reductions to the four largest agencies in the state budget: Health and Social Services, Education and Early Development, Transportation and Public Facilities, and the University of Alaska.

“The phrase that I, at least, have been using is we’re asking people to cut a nickel,” said Sen. Lyman Hoffman, co-chair of the Senate Finance Committee — adding that last year the state’s revenue sharing program was cut in half. 

At a press conference last month, Hoffman explained, “We’re not asking those four to take a 50-percent reduction, though we ask that of municipalities. We’re not asking them to take $.25 on a dollar. But if a family lost north of 60 percent of their revenue, they are going to tighten their belts, they’re not going to be going to dinner, they’re not going to be going to shows, they’re not going to be buying a new truck.”

 A Senate budget subcommittee on the university followed through on that commitment Monday, cutting $16.3 million from the budget.  

Subcommittees on the other three large departments are expected to release their proposed cuts soon. Smaller state agency budgets, meanwhile, have remained largely uncut in the Senate. 

KTVA 11’s Liz Raines can be reached via email or on Facebook and Twitter.